Molen Inc. has an outstanding issue of common stock with an annual dividend of $8.50 per share. The stock's annual dividend is expected to remain $8.50 in the future (i. e., g=0). If the required return on this stock is 6.0%, at what price should the stock sell today?

Question

Mitchell Tapia

Business

12 October, 01:00

Molen Inc. has an outstanding issue of common stock with an annual dividend of $8.50 per share. The stock's annual dividend is expected to remain $8.50 in the future (i. e., g=0). If the required return on this stock is 6.0%, at what price should the stock sell today?

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Answers (1)

Know the Answer?

Janiya Ross · Answer 1

price stock sell today is $141.67

Explanation:

given data

annual dividend = $8.50

stock = 6.0% = 0.06

to find out

what price stock sell today

solution

we know that here annual dividend and stock rate

so will find stock sell today by given formula that is

stock sell today = annual dividend / stock ... 1

put here all these value

stock sell today = annual dividend / stock

stock sell today = 8.50 / 0.06

stock sell today = 141.67

so price stock sell today is $141.67